- Dec. wheat, corn futures close to contract lows
- November soybean prices stable despite Brazil worries
- Reuters survey points to upgrade in corn, soybean yields/production
The November soybeans contract is holding steady despite Brazilian weather concerns and new lows on December wheat and corn. Photo: Shutterstock
By Ole Hansen
December wheat and corn futures are both trading close to contract lows ahead of the US Department of Agriculture's monthly WASDE crop supply and demand report due at 1600 GMT. The price of November soybeans, meanwhile, has held up in response to lingering worries that dry conditions in Brazil could delay sowings.
While weekly crop conditions report for corn and soybeans have improved, some uncertainty still lingers given a recent weather-related slowdown in the harvest. In the weekly crop progress report from the USDA covering the week to October 6, the corn harvest was 22% complete compared with a five-year average of 37%; for soybeans the number was 36% compared with 44%.
Hedge funds' positioning in the week to October 3 showed a net-short in wheat and corn and a net-long in soybeans. Positioning in all three crops, however, remained below the longer-term average given the abundance of supply.
The corn net-short at 143,201 lots was 69% of the one-year peak while wheat's 56,475 net-short was only 35%. Funds held a small net-long in soybeans of 27,758 lots, some 16% of the one-year high.
A survey carried out by Reuters points towards an upgrade to corn and soybean yields and production. Ending stocks or the carryout which is the amount of grain left over after all demand has been satisfied are expected to be lower for both soybeans and corn by the end of next August.
Wheat stocks, meanwhile, are forecast to be raised.
The report also contains updates on cotton production and stocks. This will be the first report estimating the damage to US crop from hurricanes Harvey and Irma. On that basis, both production and inventory levels are expected to be cut.
Since the initial and wild fluctuations when the hurricanes hit, cotton has settled into a range with growers happy to sell at $0.7/lb while mills have been buyers towards $0.67/lb.
— Edited by Michael McKenna
Ole Hansen is head of commodity strategy at Saxo Bank